A pretentious title requires a modest beginning. The world has increasingly destabilized and it is necessary to try to state, as clearly as possible, what has happened and why. This is not because the world is uniquely disorderly; it is that disorder takes a different form each time, though it is always complex.To put it simply, a vast swath of the Eurasian landmass (understood to be Europe and Asia together) is in political, military and economic disarray. Europe and China are struggling with the consequences of the 2008 crisis, which left not only economic but institutional challenges. Russia is undergoing a geopolitical crisis in Ukraine and an economic problem at home. The Arab world, from the Levant to Iran, from the Turkish border through the Arabian Peninsula, is embroiled in politically destabilizing warfare. The Western Hemisphere is relatively stable, as is the Asian Archipelago. But Eurasia is destabilizing in multiple dimensions.We can do an infinite regression to try to understand the cause, but let's begin with the last systemic shift the world experienced: the end of the Cold War.

The Repercussions of the Soviet Collapse

The Cold War was a frozen conflict in one sense: The Soviet Union was contained in a line running from the North Cape of Norway to Pakistan. There was some movement, but relatively little. When the Soviet Union fell, two important things happened. First, a massive devolution occurred, freeing some formally independent states from domination by the Soviets and creating independent states within the former Soviet Union. As a result, a potentially unstable belt emerged between the Baltic and Black seas.Meanwhile, along the southwestern border of the former Soviet Union, the demarcation line of the Cold War that generally cut through the Islamic world disappeared. Countries that were locked into place by the Cold War suddenly were able to move, and internal forces were set into motion that would, in due course, challenge the nation-states created after World War I and the fall of the Ottoman Empire that had been frozen by the Cold War.Two emblematic events immediately occurred. In 1990, even before the collapse of the Soviet Union was complete, Iraq invaded Kuwait and seemed to threaten Saudi Arabia. This followed an extended war with Iran from which Iraq emerged in a more favorable position than Tehran, and Baghdad seemed to be claiming Kuwait as its prize. The United States mobilized not only its Cold War coalition, but also states from the former Soviet bloc and the Arab world, to reverse this. The unintended consequence was to focus at least some Sunnis both on the possibilities created by the end of the Cold War and on the American role as regional hegemon, which in turn led to 9/11 and is still being played out now, both to the south and north of the old Cold War dividing line.The second event was the breakup of Yugoslavia and the Serbian-Croatian-Bosnian war that left about 100,000 people dead. It was a war of old grudges and new fears. It seemed to represent a unique situation that was not applicable to the rest of the region, but it in fact defined the new world system in two ways. First, Yugoslavia was the southern extension of the borderland between the Soviet Union and Western Europe. What happened in Yugoslavia raised questions that most people ignored, about what the long-term reality in this borderland would be. Second, among other things, the war centered on an east-west schism between Christians and Muslims, and the worst of the bloodletting occurred in this context. The United States and NATO interceded in Kosovo against Serbia despite Russian protests, and Moscow was ultimately sidelined from the peacekeeping mission that defused the war. The explosion in the Balkans foreshadowed much of what was to come later.While Russia weakened and declined, the two ends of Eurasia flourished. The decade following the collapse of the Soviet Union and the reunification of Germany ushered in a period of significant prosperity that had two results. The European Union, created through the Maastricht Treaty the same year the Soviet Union disintegrated, expanded its influence eastward into the former Soviet sphere and southward, incorporating disparate states whose differences were hidden by the prosperous period. And China, after the end of the Japanese economic miracle, became the global low-wage, high-growth country, powered by the appetite for its exports in prosperous Europe and North America.The forces at work in Eurasia were hidden. The fragility of peripheral nations in Europe relative to German economic power was not fully visible. The cyclical nature of China's growth, similar in many ways to the dynamics of Japan in the previous generation, was also invisible. The consequences of the end of the Cold War Islamic world, the forces that were unleashed beneath the surface and the fragility of the states that were containing them were hidden beneath the illusion of American power after the victory in Kuwait. Only in Russia was weakness visible, and one of two erroneous conclusions was reached: Either Russia was permanently impotent, or its misery would cause it to evolve into a liberal democracy. All seemed right with Eurasia.

Signs of Destabilization

The first indication of trouble was, of course, 9/11. It was the American attack that was critical. Drawing on the recollection of Desert Storm, it was assumed that American power could reshape the Islamic world at will. All power has limits, but the limits of American power were not visible until later in the 2000s. At that point two other events intervened. The first was the re-emergence of Russia as at least a regional power when it invaded Georgia in 2008. The other was, of course, the financial crisis. Both combined to define the current situation.The financial crisis transformed Chinese behavior. Although China was already reaching the end of its economic cycle, the decline in appetites for Chinese exports changed the dynamic of China's economy. Not only did the decline suppress growth, but Beijing's attempts to shift growth to domestic consumption created inflation that made its exports even less competitive. The result was a political crisis as the Chinese government became increasingly concerned about instability and therefore increasingly oppressive in an attempt to control the situation.At the other end of Eurasia, the differences between the interests of Germany — Europe's major exporter — and those of Southern Europe's developing economies exposed the underlying contradiction in the European Union. Germany had to export. The weaker countries had to develop their economies. The two collided first in the sovereign debt crisis, and again in the austerity policies imposed on Southern Europe and the resulting economic crisis. As a result, Europe became increasingly fragmented.In a reversal of roles, Russia took advantage of the fragmentation of Europe, using its status as a natural gas supplier to shape Europe's policies toward Russia. Russia was no longer the cripple of Europe but a significant regional power, influencing events not only on the Continent but also in the Middle East.It was at this point that Russia encountered the United States. The United States has an elective relationship with the rest of the world. Except when a regional hegemon is trying to dominate Europe, the United States limits its global exposure. It exports relatively little, and almost half of what it does export goes to Canada and Mexico. But as Russia became more assertive, and particularly as it tried to recoup its losses after the fall of the Ukrainian government and the ensuing installation of a pro-Western government, the United States began to increase its focus on Ukraine and the borderlands between Europe and Russia.At the same time that Washington felt it had to respond to Russia, the United States sought to minimize its exposure in the Middle East. Recognizing the limits of its power, the United States came to see the four indigenous powers in the region — Turkey, Iran, Saudi Arabia and Israel — as bearing the primary responsibility for regional stability and as counterbalances to each other's power.

The Current State of Play

This brings us to the contemporary world. There is general economic malaise around the globe. That malaise has forced China to control social forces by repression. It has created an existential crisis in Europe that goes far beyond Greece but is being acted out in a Greek-German relationship. The Russians have reached for regional power but have fallen short, for the moment. The nation-states of the Middle East are fraying, and the four major powers are maneuvering in various ways to contain the situation.The United States remains the world's leading power, but at the same time, the institutions that it used during the Cold War have become ineffective. Even though NATO is increasing deployments and training in Eastern Europe, it is a military alliance that lacks a substantial military. The International Monetary Fund has become, in many cases, the problem and not the solution to economic difficulties. The United States has avoided entanglement in the economic problems in Europe and China and has limited its exposure in the Middle East. Yet it is becoming more directly involved with Russia, with its primordial fear of a European hegemon aroused, however far-fetched the prospect.After every systemic war, there is an illusion that the victorious coalition will continue to be cohesive and govern as effectively as it fought. After the Napoleonic Wars, the Congress of Vienna sought to meld the alliance against France into an entity that could manage the peace. After World War I, the Allies (absent the United States) created the League of Nations. After World War II, it was the United Nations. After the Cold War ended, it was assumed that the United Nations, NATO, IMF, World Bank and other multinational institutions could manage the global system. In each case, the victorious powers sought to use wartime alliance structures to manage the post-war world. In each case, they failed, because the thing that bound them together — the enemy — no longer existed. Therefore, the institutions became powerless and the illusion of unity dissolved.This is what has happened here. The collapse of the Soviet Union put into motion processes that the Cold War institutions could not manage. The net assessment, therefore, is that the Cold War delayed the emergence of realities that were buried under its weight, and the prosperity of the 1990s hid the limits of Eurasia as a whole. What we are seeing now are fundamental re-emerging realities that were already there. Europe is a highly fragmented collection of nation-states. China contains its centrifugal forces through a powerful and repressive government in Beijing. Russia is neither an equal of the United States nor a helpless cripple to be ignored or tutored. And the map of the Middle East, created by the Ottomans and the Europeans, has hidden underlying forces that are rearing their heads.The United States is, by far, the world's most powerful nation. That does not mean that the United States can — or has an interest to — solve the problems of the world, contain the forces that are at work or stand in front of those forces and compel them to stop. Even the toughest guy in the bar can't take on the entire bar and win.

The oil price collapse is not over yet. It is more likely that Brent price could fall back into the mid-$50 range than that it will continue to rise toward $70 per barrel.

That is because oil prices have risen based on sentiment alone. The fundamentals of supply and demand indicate a dismal reality: oil prices will fall and may fall hard in the near term.Our present situation is like that of the cartoon character Wile E. Coyote. He routinely ran off of a cliff and as long as he didn’t look down, everything was fine. But as soon as he looked down and saw that there was no ground beneath him, he fell. Hope and momentum cannot overcome gravity.

Neither can ignoring the data.When I look down from $60 WTI and almost $68 Brent, I see no support except sentiment. Like Wile E. Coyote, we need a gravity lesson about oil prices. What goes up for no reason, will come down sooner than later and it may fall hard.Let’s examine the facts.The principal reason for the oil-price collapse is a production surplus–more supply than demand for oil. The latest data from EIA (Figure 2) indicates that the surplus is the greatest since the current oil-price collapse began. In other words, the cause of the price collapse is getting worse, not better!

With data like this from EIA and IEA, how can anyone be optimistic that even higher oil prices may be coming? How can anyone say that the price increase in recent months has any relationship to reality whatsoever?Both IEA and OPEC offered grave concerns about persistent over-supply in their recent monthly reports that seem to have been ignored or dismissed in the jubilance of higher oil prices.

Analysts may be hopeful that the drop in U.S. rig counts–which has almost stopped in the last two weeks–will result in a decrease in tight oil production. I believe that is true but the U.S. is not the world and the world continues to add production.With somewhat higher prices, some tight oil producers like EOG say they are ready to aggressively grow production again if prices stabilize around $65 per barrel. If other producers do the same, so much for the as-yet-to-be seen production decline from lower rig counts.Many point to signs of increased oil demand because of low product prices as a positive trend. I agree but as long as production is growing faster than consumption, we have an over-supply problem.I hope that the rebound in oil prices over the past two months is sustainable and that prices continue to rise. But hope doesn’t count much for very long in global markets. The data so far says that the problem that moved prices to almost $40 per barrel in January has only gotten worse. That means that recent gains may vanish and old lows might be replaced by lower lows.Wile E. Coyote never learned the lesson of gravity but that was in a cartoon. This is real.

Russia, Turkey and the West all share one rival in the Balkans: political instability. Located at the confluence of three historic empires, the strip of land between the Mediterranean and the Black Sea has long been the focus of competition among global powers. Now it is just one arena in the standoff between Russia and the West. Yet, with both sides attempting to buy influence with investments and energy projects, and with Turkey struggling to keep pace, internal political challenges threaten to undermine outside efforts to develop and shape the region. As major powers use their financial and political clout to gain influence in the Balkans, weak local governments will continue to balance among competing nations.

Analysis

Regional and world powers have paid an inordinate amount of attention to Balkan countries lately. On May 15, Russian Foreign Minister Sergei Lavrov visited Serbia, just a few days after the Chair of the Russian Federation Council, Valentina Matviyenko, met with Serbian leaders in Belgrade. Turkish President Recep Tayyip Erdogan will visit Bosnia-Herzegovina on May 20 — Turkish Foreign Minister Mevlut Cavusoglu and Deputy Prime Minister Ali Babacan have paid similar visits in the past month. Western leaders have also demonstrated an interest in the region, with U.S. Secretary of State John Kerry and British Foreign Secretary Philip Hammond visiting Bulgaria in January, while high-ranking U.S. officials regularly visit Romania.

Strategic Investments From the West

Western governments have two major goals in the Balkans: to maintain stability in the western part of the region and to minimize Russian influence. To that end, the United States and the European Union have been involved in the internal politics of the Balkans since NATO committed troops in the aftermath of the Bosnian war and the conflict in Kosovo in the 1990s. Western troops continue to serve in Kosovo in a peacekeeping capacity. The European Union has used considerable amounts of resources and political capital to bring reform and economic development to the region, but with mixed results.The West has the advantage of access to ample development and defense funds that can be divided out among countries hungry for economic growth. Countries such as Serbia and Macedonia are unlikely to join the European Union in the next decade; they are held back by internal divisions and face resistance from current EU members. Yet they still have access to the economic benefits that come from close ties with Europe. Between 2014 and 2020, the European Union plans to grant 1.5 billion euros (around $1.7 billion) to Serbia, a prospective EU member, and 11.4 billion euros to Bulgaria, a current EU member. (Bulgarian citizens benefit from the ability to travel freely and work in the European Union.) In addition, there is significant defense assistance coming into Bulgaria as part of an effort to strengthen NATO members along the Russian borderlands.The Ukraine crisis galvanized the United States into boosting defenses along NATO's eastern edge. NATO has enlarged its multinational response force, created a new spearhead force that can mobilize quickly and established a chain of outposts in the eastern Balkans called force integration units, which could serve as command centers during a conflict.At the same time, fighting in Ukraine prompted the European Union to prioritize its Southern Corridor natural gas project, which would bypass Russian energy giant Gazprom in the European energy market and reduce Europe's reliance on Russia. In addition, the West strongly discouraged Bulgaria from participating in Russia's South Stream project. When Bulgaria opted out, Russia canceled the project in December.

Russia Counters the West

For its part, Russia has used its influence in the Balkans, where it has close historical and cultural ties with countries such as Serbia and Greece, to threaten Western interests. However, the Kremlin's interest in the region in the past year stems in large part from its deteriorating relationship with the West. Russia's goal in the Balkans is to prevent the expansion of Western troops and military infrastructure in the region while maintaining sufficient strength to implement strategic energy infrastructure projects.Although the West has greater resources to invest in the Balkans, Russia owns several regional energy assets and holds a number of outstanding loans to Balkan governments. Moscow has managed to retain good diplomatic relationships with some local oligarchs, especially in Bulgaria. In 2008, Gazprom bought a majority stake in Serbian oil firm NIS. Like the European Union, Russia has provided funding to Serbia — about $1.5 billion in over the past two years. The Kremlin also sealed energy and loan deals with the Republika Srpska, the ethnic Serb entity in Bosnia-Herzegovina.Western pressure may have ended the South Stream project, but the pipeline Russia plans to build in its place, Turkish Stream, could help Gazprom counter European energy diversification efforts. The pipeline would bring natural gas across the Black Sea to the Turkey-Greek border. To help Gazprom reach Central European markets, Russia has advocated the construction of a pipeline that would run from Greece to Macedonia, Serbia and Hungary. In addition to Turkey, these four countries are at the center of a Russian diplomatic offensive. Nevertheless, with Russia struggling to manage internal financial and political challenges, its leverage in the Balkans is relatively limited.

Turkish Interests

Turkey has its own cultural links and economic interests in the Balkans, but it currently lacks the resources and military power to rival Russia or the West.One of Turkey's strategic objectives is to maintain influence in the Black Sea. Historically, Ankara has achieved this by anchoring itself on the Danube. By extension, this objective entails managing relations with other Black Sea states in the Balkans. But Turkey is also attempting to grow closer to Bosnia-Herzegovina, where Ankara means to enhance its influence through cultural and historical ties. These connections are important: Muslim Bosniaks started migrating to Turkey in the 17th century, and a few million Turkish citizens claim Bosniak roots today. This ethnic affinity has prompted popular government initiatives to invest in Bosnia-Herzegovina.Turkey cannot match the level of financial investment Western powers and Russia commit to the Balkans. But as the gatekeeper to the Black Sea and as a NATO member, Turkey plays a significant role in Bulgarian and Romanian efforts to boost defense cooperation in response to the crisis in Ukraine. Moreover, Turkey has been able to use financial and political tools to curry favor with Bosnia. Turkey is among the top five investors in the country. In fact, Turkish officials claim that Turkey has invested $1.1 billion in Bosnia since 1995 — a significant sum for a country with a gross domestic product of about $18 billion. The Turkish Stream pipeline, if built, would no doubt empower Turkey. Ankara would play a central role in its construction, and it would use that role to improve its relationships with countries that would receive Turkish Stream natural gas, including Macedonia and Serbia.

Violence in Macedonia

Despite the attention they command from larger powers, the Balkans are often unstable, and their instability can impede the influence of foreign powers. For example, deadly violence erupted in Macedonia on May 9, when Interior Ministry personnel cracked down on alleged ethnic Albanian militants in Kumanovo, culminating in the death of eight police officers and 14 alleged militants. Nearly 40 policemen were injured and 30 militants were arrested. There are also unconfirmed reports of civilian casualties.The Macedonian government argued that its operation in the town was to prevent militants from carrying out planned terror attacks inside the country. However, the timing of the operation led many to believe the crackdown was politically motivated — a distraction that could divert attention from a recently discovered illegal government wiretapping program.

The bloodshed in Kumanovo, coupled with revelations of the illegal acquisition of information of citizens, further undermines the credibility of a government that is already distrusted by its people. On May 17, tens of thousands of protesters gathered in Macedonia's capital city, Skopje. Western-sponsored talks the following day failed to bring about a compromise between the government and opposition parties, and the government's hold on power remains tenuous.Russia is counting on running its extension of Turkish Stream through Macedonia into Central Europe, but the country's instability threatens to derail these plans at a time when countries along alternative routes are not receptive to Russian proposals. The incumbent Bulgarian government, under pressure from the United States and the European Union, is opposed to participation in a Russia-led energy project, while Albania retains a pro-Western foreign policy orientation.With so much at stake, the Russian Foreign Ministry came out forcefully in support of the Macedonian government in response to the protests. The ministry criticized opposition parties and non-governmental groups alike, accusing them of being in league with Western powers and choosing to follow a chaotic "color revolution" ideology. Macedonia's incumbent government is nominally in favor of NATO and EU accession but has been open to Russia's Turkish Stream proposals. A weak government, as well as growing instability in Macedonia, is preventing the country from becoming a staunch Western ally or a reliable partner for Russia.

A Broader Regional Challenge

Clashes in Macedonia raise the specter of renewed ethnic tension and violence in the Balkans, where political borders do not coincide with ethnic boundaries. Though recent violence probably will not spill over into nearby countries in the immediate future, Macedonia's problems are a concern in the region. Serbia raised its combat alert status, and Bulgaria sent troops to reinforce the border.Since 1999, Western governments have worked to stabilize Kosovo and the surrounding area through the presence of peacekeepers and large-scale development programs. Brussels is also pressuring Serbia to normalize relations with Kosovo as a precondition for EU accession. A potential increase in militancy along the Kosovo-Macedonia border would threaten this stability and undermine the West's long-standing efforts in the region.Ultimately, no matter how much time and external political power is invested in the Balkans, success depends on the presence of strong, stable governance. But Balkan governments are notoriously weak. In Bulgaria, social unrest in 2013 forced the government to resign. Since then, the country has gone through several weak, short-lived governments that have been beset by internal disputes. Meanwhile in Bosnia-Herzegovina, political paralysis has prevented the introduction of much-needed economic and political reform. Protests over corruption in 2014 highlighted the Bosnian political system's inability to address the country's inherent problems.The tumult of Balkan politics enables foreign powers to make certain inroads, boosting their influence through financial and political support for local governments. But the fragility of Balkan states prevents them from swinging decisively toward one outside power. Like other nations in Europe's borderlands, many of the Balkan countries have attempted to retain a degree of neutrality. A balancing strategy means that Balkan governments can access advantageous economic agreements, financial assistance packages and political support from multiple external powers.Geopolitical rivalries and local disputes in the region have historically formed an explosive combination, fueling military conflicts like World War I as well as numerous Balkan armed struggles. Today, a more nuanced competition is taking place as foreign powers use economic influence, defense cooperation, and political support to further their goals in the region.The conflict in Macedonia — and the potential it has to upset Russia's plans in the region — embodies the problems foreign powers find in the Balkans. While the West, Russia and Turkey are all eager to pump capital into the region for their own betterment, weak governments will continue balancing among outside powers.

The U.S. economy is driving along without much insurance for when it crashes.

Almost six years since the bottom of the last recession, the world’s largest economy lacks the monetary and fiscal power to reverse the next contraction as threats to sustained growth build.“We’re probably closer to the next recession than we are to the last one,” Stephen King, chief global economist at HSBC Holdings Plc in London, said in a telephone interview. “If I was a policy maker having sleepless nights it would be partly related to what I would do if there was a recession.”The fear is there’s not much they can do. In the slumps since the 1970s the Fed cut its benchmark interest rate by an average 6.2 percentage points and a minimum of 5 points, yet at near zero now such a response is impossible, King wrote in a report this week. More quantitative easing could end up only powering asset prices rather than demand, he said.

Although the federal budget deficit has narrowed to about 3 percent of gross domestic product, that’s still more than before most of the past downturns and the government’s debt is larger than before the 2008 financial crisis.“By now in previous economic cycles, policy will have normalized,” said King. “If there was a recession now it would be much more difficult to fight out of it.”

Empty Armory

It’s little surprise the policy armory hasn’t been replenished. The current recovery is weaker than the last five upswings with average growth since the recession’s trough only just topping 2 percent. Inflation is lackluster with King noting the Fed has never raised rates when it has been so weak.So while the Fed took 31 months in the last period of growth to boost rates, this time it’s gone 70 months and counting without doing so.Intensifying his concern is that King sees a series of potential contraction triggers. Stocks could slide if higher U.S. wages alongside weak productivity erode profits. The non- bank financial system of pension funds and insurance companies may struggle to meet future liabilities, while a slump in China could drag the U.S. down. The Fed could also err by tightening policy prematurely as the European Central Bank did in 2011.Doubting the ability of policy makers to avoid a recession or to refashion stimulus, King is left with an unorthodox solution for how they can build back the scope to fight economic shrinkage.

He would spur people to save less by having them retire later with the resulting pickup in demand creating the higher tax revenues and interest rates needed to repel the next downturn. The problem is older people are more likely to vote than the young, weakening the chances of such reform.“As a result, the recession-fighting ammunition will remain in short supply and the risks of a major economic contraction will be that much greater,” said King.

We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.